Fed’s Williams Says Central Banks May Have Less Room to Ease In Downturns

NEW YORK—Federal Reserve Bank of San Francisco President John Williams said on Friday that central banks’ largely successful pursuit of low inflation could mean they more frequently run into periods where monetary policy hits levels of interest rates that can’t be cut further.

At issue is what central banker’s call the zero lower bound, or the point at which the central bank’s short-term interest rate has been cut to near zero. The...